Oil and gas reservoirs are accumulations of hydrocarbons trapped within the earth's crust. The hydrocarbons exist as fluids within the pore space of porous rocks. If flow of the fluid is possible, then the accumulation may be an exploitable reservoir. The reservoir is typically produced by drilling wells into the appropriate formation to allow flow through the porous rock towards and into a producing well, and ultimately to the surface.
When considering investment decisions and day-to-day operations, reservoir engineers would like to be able to predict the hydrocarbon recovery, given certain assumptions about the reservoir, production system, and operating conditions. Historically, this has been achieved using simple analytic models, but since the advent of the computer, engineers have simulated the subsurface formation and fluid flow using numerical methods.
The computer programs used to do those simulations are usually referred to as reservoir simulators. Different reservoir simulators may use different numerical techniques, and may make different physical assumptions, but all aim to solve equations describing the flow within the reservoir to provide predictions of the fluid movement. Often the simulations will use significant computer resources and take considerable time to run.
Reservoir simulators since the 1960s have discretized the reservoir into grid blocks representing small regions of space. Such simulators are known as finite volume models. For such models, fluid is assumed to be conserved for each grid block. Typically, the pressure is solved for implicitly, while the saturations or concentration variables that describe the composition of the fluid in a grid block may be solved explicitly or implicitly.